Liberty Mutual Halts Direct Sales to Mid-Market, Will Use Independent Agents Only

Liberty Mutual Group is discontinuing direct distribution to mid-sized businesses and now plans to distribute its commercial property/casualty insurance products in the middle market exclusively...

February 3, 2009

Liberty Mutual Group is discontinuing direct distribution to mid-sized businesses and now plans to distribute its commercial property/casualty insurance products in the middle market exclusively through independent agents and brokers.

Liberty Mutual defines the middle market as businesses with total account premium ranging from a low of about $150,000 up to about $1.5 million in total account premium. The company is also creating a new commercial business unit, Liberty Mutual Middle Market, which will accept and serve middle market business only from agents and brokers going forward. Products available will remain workers' compensation, general liability, commercial automobile, property, crime and umbrella for mid-sized companies.

"PIA hails the decision by Liberty Mutual," said PIA National Executive Vice President & CEO Leonard Brevik. "Liberty Mutual has recognized that the professional independent insurance agency distribution system is the best choice for carriers and preferred choice of customers. In particular, mid-sized businesses depend on the expertise of independent agents to provide the choices they need. This is a resounding vote of confidence for independent agents."

As part of its new plan, Liberty Mutual plans to expand its network of agents and brokers, including making middle market policies available to producers already writing personal-lines and small businesses. The moves recognize that about 95 percent of middle market business insurance is sold by independent agents and brokers, not through direct distribution. The company acknowledged that by limiting itself to direct distribution in the middle market, it was missing out on opportunities to grow.

"For years, agents and brokers have sought to place their middle market clients with Liberty Mutual but couldn't access us because we distributed directly to that segment of the market. Now they can. And we are giving middle market businesses what they want, the opportunity to have Liberty Mutual as their carrier, and still work with their trusted advisor -- their agent or broker," said J. Paul Condrin, Liberty Mutual's president of Commercial Market, in a statement to Insurance Journal.